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In March 2019, the Australian Accounting Standards Board (AASB) published its Research Report No. 9 "Perspectives on IAS 36: A case for standard setting activity".

The research report states that it has been widely observed that application of the existing version of IAS 36, Impairment of Assets is problematic in practice, causing significant issues at all stages in the financial reporting cycle. The authors conclude that the ongoing application issues demonstrate consistent divergence in understanding between preparers, users, auditors and regulators as to the procedures that should be applied in ensuring that assets are carried at no more than their recoverable amount. They are convinced that IAS 36 requires holistic reconsideration rather than piecemeal changes focussed on disclosure. The research report therefore recommends:

Review IAS 36 in its entirety with a view to issuing a new standard that provides principles that enable users, preparers, auditors and regulators to develop a common understanding of the practical aspects of undertaking the procedures applied to ensure that assets are carried at no more than their recoverable amount.

Other themes and recommendations coming out of the research include:

There is an overall lack of clarity on the purpose of the impairment test;

the application guidance does not align with internal decision-making; and

On March 15, 2019, the Securities and Exchange Commission (SEC) published a speech by William Hinman, Director of the Division of Corporation Finance, given at the 18th Annual Institute on Securities Regulation in Europe.

In his speech, Mr. Hinman discussed how the U.S. securities disclosure requirements, which are largely principles-based, apply in areas where the disclosure topics may be complex, associated with uncertain risks and rapidly evolving. The flexibility of principles-based disclosure requirements should result in disclosure that keeps pace with emerging issues, like Brexit or sustainability matters, without the need to for the SEC to continuously add to or update the underlying disclosure rules as new issues arise.

On March 20, 2019, the International Accounting Standards Board (the Board) published an article by Sue Lloyd, Vice-Chair of the IASB and Chair of the IFRS Interpretations Committee, on the timing of stakeholders’ compliance with IFRS Interpretations Committee agenda decisions.

At its December 2018 meeting, the Board decided to update its Due Process Handbook to allow companies “suf­fi­cient time” to implement changes in accounting policy that result from the IFRS Interpretations Committee’s agenda decisions.

In the new article, Ms. Lloyd reminds readers that the IFRS Interpretations Committee publishes agenda decisions after it decides a stakeholder issue does not require standard-setting measures. Instead, the Committee explains how existing IFRS® Standards apply to the stakeholder’s issue. Ms. Lloyd notes:

[T]he Board has acknowledged that agenda decisions often provide new information that should be seen as helpful and persuasive (for example, by integrating requirements in the Standards with material in the Basis for Conclusions and Illustrative Examples). This means that a company does not have an error simply because its application of IFRS Standards was inconsistent with an agenda decision.

She goes on to acknowledge that “it may take time to implement such an accounting policy change” and further discusses the Board’s concept of “sufficient” implementation time:

[I]t depends on the particular facts and circumstances. It will depend on the accounting policy change and the reporting entity. Preparers, auditors and regulators will need to apply judgement to determine what is sufficient. But as a rule of thumb I think it is fair to say that we had in mind a matter of months rather than years.

Ms. Lloyd emphasizes that companies should consider agenda decisions — and begin implementing necessary accounting policy changes — on a more timely basis. She underscores that judgement is required, just as it is with applying IFRS Standards.

On February 28, 2019, the Corporate Reporting Dialogue (CRD), which brings together organizations that have significant international influence on the corporate reporting landscape, released a position paper supporting the development of better reporting guidelines for the Sustainable Development Goals (SDGs).

Participants of the CRD advocate working together to provide guidance and structure for businesses to be transparent and accountable, and to ensure better decision-making that promote financial stability and sustainable development.

The paper, entitled SDGs and the future of corporate reporting, identifies how corporate reporting can illustrate which SDGs are relevant to a company’s business model, enabling both companies and investors to focus on those SDGs most likely to impact financial performance. The paper also articulates the importance of driving integration of financial and non-financial information to demonstrate how companies create value for stakeholders over the short and long term. In addition, the paper outlines the work that the participants of the CRD, as framework providers and standard-setters, must undertake to ensure there is guidance for business at the level of the underlying SDG targets and to ensure that businesses are producing meaningful information and indicators.

On March 27, 2019, the European Securities and Markets Authority (ESMA) published a report that provides an overview of the activities of ESMA and the accounting enforcers in the European Union (EU) when examining compliance of financial information provided by issuers listed on regulated markets with the applicable financial reporting framework in 2018.

European enforcers examined the financial statements of about 950 issuers representing an average examination rate of 16% of all IFRS issuers with securities listed on regulated markets. These examinations resulted in 328 actions taken to address material departures from IFRS.

Enforcers also assessed the non-financial information related to ESG for 819 issuers, covering approximately 31% of the total estimated number of issuers subject to the new requirements, resulting in 51 enforcement measures.

In addition, 746 management reports were reviewed for evaluating compliance with ESMA’s guidelines on alternative performance measures, covering around 15% of all IFRS listed issuers in Europe against which were taken 136 corrective actions.

Review the full report on the ESMA's website. ESMA has also updated its compliance table showing which competent authorities have informed ESMA that they comply, do not comply or intend to comply with the ESMA’s guidelines on the enforcement of financial information.

On March 25, 2019, the Financial Accounting Standards Board (FASB) issued a revised proposed Accounting Standards Update (ASU) intended to improve the relevance of current income tax disclosure requirements to financial statement users. Comments on the proposed ASU are requested by May 31, 2019.

In July 2016, the FASB issued a proposed ASU that set forth enhanced disclosure requirements for income taxes. The proposed ASU was part of the FASB’s broader disclosure framework project to improve the effectiveness of disclosures in notes to financial statements.

The FASB delayed finalizing the proposal because of potential tax reform. The federal government subsequently passed the Tax Cuts and Jobs Act in December 2017, which substantially changed how U.S. businesses are taxed. As a result, the FASB decided to revise its original proposal.

The resulting proposed ASU reflects these revisions, as well as stakeholder input on the original July 2016 proposal. The revised proposed ASU would (1) remove disclosures that no longer are considered cost beneficial or relevant and (2) add disclosure requirements identified as relevant to financial statement users.

On March 6, 2019, the International Accounting Standards Board (the Board) published a speech given at the Seminario international sobre NIIF y NIF in Mexico City, Mexico. In the speech, IASB® chair Hans Hoogervorst discussed IFRS as global standards, recently issued major Standards, and the Board’s project on primary financial statements.

Mr. Hoogervorst began with a recap of the progress IFRS® Standards have made globally with 144 jurisdiction which have adopted IFRS Standards. He mentioned that other jurisdictions, such as China, India, and Indonesia, have substantially converged their national accounting requirements with IFRS Standards and that the United States remains as the only large jurisdiction where adoption has stalled.

Next, he shared feedback on the big four Standards (IFRS 9, IFRS 15, IFRS 16, and IFRS 17) that have been issued and provided examples of how these Standards have benefited financial reporting.

Lastly, Mr. Hoogervorst discussed the primary financial statements project, which he considers a "game changer" since it provides an opportunity to improve the communications effectiveness of financial statements. He noted that:

Overall, our decisions thus far will create much more structure in the income statement and will definitely enhance comparability. The improved structure will make it much easier for users to find the components for the analysis that they prefer. The increased transparency around the adjustments that companies make in their non-GAAP measures will provide the investor with a lot of information about the underlying strategy of management.

On March 21, 2019, the International Accounting Standards Board (the Board) published "Disclosure Initiative — Principles of Disclosure project summary" which summarizes the work performed and conclusions reached in the principles of disclosure research project.

In March 2017, the Board issued a discussion paper (DP) on possible approaches to address disclosure issues, such as the lack of relevant information, too much irrelevant information, and ineffective communication of the information provided. Feedback for the DP revealed that “improving the way disclosure requirements are developed and drafted in IFRS® Standards is the most effective way it can help to address the disclosure problem.” This lead the Board to prioritize its project on targeted Standards-level review of disclosure. The Board also addressed other findings during its research related to accounting policy disclosures, the implications of technology on financial reporting, and use of performance measures in financial statements. Other topics in the DP will not be pursued and this project summary closes the research project.